Marx-Engels Correspondence 1867
Source: MECW Volume 42, p. 409;
First published: in Der Briefwechsel zwischen F. Engels und K. Marx, Stuttgart, 1913.
On the question of the replacement-fund, full details with accompanying calculations tomorrow. You see, I must ask some other manufacturers whether our practice is the customary one or an exception. The question is whether, with an original outlay of £1,000 on machinery, where £100 is written off in the 1st year, the rule is to write off 10% of the £1,000 in the 2nd year, or of £900, etc. We do the latter, and understandably the matter goes on thereby in infinitum at least in theory. This complicates the arithmetic considerably. But, otherwise, there is no doubt that the manufacturer is using the replacement-fund on average for 4½ years before the machinery is worn out, or at least has it at his disposal. However, this is included in the calculations, by way of what one might call a certain guarantee against moral wear and tear, or alternatively the manufacturer says: the assumption that in 10 years the machinery will be completely worn out is only approximately correct, i.e., it presupposes that I receive the money for the replacement-fund in 10 annual instalments from the outset. At all events, you shall have the calculations; regarding the economic significance of the matter, I am none too clear about it, I do not see how the manufacturer is supposed to be able to cheat the other partners in the surplus-value, that is, the ultimate consumers, by thus falsely representing the position — in the long run. Nota bene, as a rule, machinery is depreciated at 7½%, which assumes a useful life of approximately 13 years.
Moore sends you his photograph, enclosed, and reminds you that you promised him yours, which he is very eager to have. The chapter on accumulation is quite splendid.